SCC looks to expand in Cambodia

22 June 2004

Siam Cement. Thailand’s biggest industry conglomerate, said yesterday it is analysing an investment plan to extend its business in neighbouring countries which may involve an outlay of $150m. SCC, whose core business is cement, said that the investment mainly focuses in Cambodia, but the political stability of the country would be the key determiner to its planned investments ­ reports the Business Day.

SCC also said that it expects to invest another 200 million baht in Thailand to increase its output of dry mortar, which would increase its production capacity by 200,000tpa to 600,000tpa. The expansion is expected to be completed by 2005. Pramote Techasupatkul, president of Siam Cement Industry (SCI), one of the six co-businesses of SCC, said the company is looking to expand to Cambodia because the country has a high cement consumption.

³The plan may use US$150m or six billion baht for the investment. However, the politics in Cambodia will be the main factor for our decision. He said cement consumption in Cambodia is about 1.5-2Mta, which is high enough to generate good returns for the investment. Vietnam, along with Myanmar have high cement demands, but Myanmar already has its own production capacity.

In 2003, SCI sold 9Mt of cement for domestic use and exported 6Mt while the company projected that domestic sales should increase by 10 per cent to 10Mt, despite the decline of export sales to 5Mt this year due to the rising domestic demand and overseas freight fees. During the first five months, SCI generated 15 billion baht in sales or around 25 per cent of SCC¹s total revenue. SCI projected that the company¹s revenue and net profit should increase by 10 per cent at the end of this year in line with the market growth. At present, SCI¹s production capacity is 23.2Mta out of a total market capacity of 54Mta in Thailand. Domestic consumption is currently about 60-70 percent of all of the company¹s production.

For the first half of this year, the demand for domestic cement consumption was 6.8Mt, or a 10 per cent growth when compared with the same period last year. SCI has a 38-40 per cent share in the market followed by Siam City Cement Plc with a 25 per cent share. Pramote said that the rising cement prices and demand would be capped by the rising fuel costs which have risen by five per cent from the same period last year.

Yesterday, SCI launched five new products to cater for all of its customers¹ needs. They are precast cement, pozzolan cement, white plaster mortar, fine white plaster mortar and white skim coat. ³Our new products may generate low sales this year, but we hope sales will increase at a high growth rate next year due to our marketing campaign to promote them,² he said.

SCI is the manufacturer and supplier of Tiger and Elephant brand grey cement, Twin Tiger brand dry mortar and White Elephant brand white cement. The company is the country¹s largest cement exporter and a major player in Asean.